Feb 21, 2013
“Is sequestration going to happen?”
It’s a question I hear over and over again in forums for large and small business. (Seriously, who expects a bankable answer to that question at a chamber mixer?) I think when business folks ask other business folks about sequestration, what they really want to know is, “What is your plan B?”
And while sequestration may require your business to come up with a backup plan, your business’ Plan B (or Plan A) should take advantage of the changes in international markets that can create significant opportunities for U.S. small businesses. Last month, for example the Export-Import Bank of the United States (Ex-Im Bank) said India will overtake Mexico to emerge as its biggest market this year. Earlier this month, the bank pledged $500 million in new funds to finance Indian exports of U.S. goods and services. The bank already has $8.5 billion in existing commitments towards India.
If your business is new to exports and not familiar with Ex-Im Bank programs, they are a great resource. The bank can provide direct loans to your overseas buyers – meaning direct financing for your buyer to purchase from you. The bank also offers your business working capital guarantees (pre-export financing), export credit insurance and loan guarantees. No project is too large or too small and, on average, 85 percent of the bank’s transactions directly benefit U.S. small businesses.
Where should you look to export? Emerging and growth-leading economies (conveniently abbreviated as “EAGLES”) are expected to be responsible for half of all global growth in the next decade, according to the Spanish bank BBVA. Compare that figure with the 30 percent combined global growth forecasted for the U.S., United Kingdom, Japan, Italy, Germany, France and Canada.
(EAGLES includes 10 countries: Brazil, China, Egypt, India, Indonesia, South Korea, Mexico, Russia, Taiwan and Turkey.)
Plan B should include exploring to these fast-growing markets. Your plan should utilize the myriad resources to help business succeed abroad. In addition to Ex-Im Bank programs, there are a number of resources to help small business export.
A good starting point is your local economic development agency. The agency may offer grants to attend oversea trade shows, provide market intelligence and vetted export opportunities and give guidance on the export process and government regulations.